Cross-selling Is Not Evil!


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You can’t read or hear anything about Wells Fargo without cross-selling popping up.

“At Wells Fargo, apparently, the solution in recent years was aggressive ‘cross selling’ of its existing customers – that is, urging them to open credit card accounts to go with their checking accounts, and so on, in order to generate more fees,” The Washington Post said in a September 22d editorial, Accountability at Wells Fargo.

OK. Now, tell us what Wells Fargo did wrong.

That’s a longer sentence. Here it is: “At Wells Fargo, apparently, the solution in recent years was to reward senior management with enormous bonuses tied to stock price appreciation regardless of the strategic and ethical risks, allowing them to set excessively high performance targets for low-paid sales staff, align pay incentives with sales goals unrelated to customer satisfaction, crush internal dissent, and emasculate internal audit controls.” Yep – That pretty much sums it up!

But that’s complicated, and it doesn’t sell newspapers, or bring eyeballs to a webpage. So cross-selling stays in lead sentences and headlines, carrying disdain that will now be hard to shake. If I were unfamiliar with business development, I might mistakenly think of cross-selling as a deviant or manipulative behavior, like getting the prospect to say ‘yes’ three times, or the reviled assumptive close.

That’s unfair. Disclosure: I’m a cross-seller, and have been for many years. Cross-selling is “the action or practice of selling an additional product or service to a customer,” according to Wikipedia. As a software salesperson, I cross-sold hardware, software, services and third-party products. As an account executive with an auto-ID manufacturer, I cross-sold products from different divisions in my company. And I cross-sold services that my VAR’s (Value-added Resellers) provide. No one was harmed. Laws were not broken. In fact, my customers loved the convenience, and the revenue was credited to my quota. My W-2 and 401K became flush with dinero. Life is good!

Cross-selling offers substantial benefits for vendors, especially for large, diversified companies with multiple-divisions calling on the same buyers or decision makers. With cross-selling, they can reduce overhead and redundant systems. Buyers gain efficiencies, too. With cross-selling, they can work with account teams that have a “big-picture” view, and don’t need to schedule multiple meetings with reps from uncoordinated business units within the same company. What makes Wells Fargo’s actions reprehensible wasn’t that they engaged in cross-selling, it was how they did it.

Expect more cross-selling, not less. When customers implement projects and systems, they buy many interdependent technologies and services. Some vendors provide end-to-end solutions, but their complexities mean that few salespeople can possess all the required knowledge. They must collaborate internally and externally, and for that reason, cross-selling makes sense. So does paying salespeople for engaging in it – when customers benefit. That’s touchy, so I’ll widen the strike-zone: as long as customers are not harmed.

The right question to ask is not, “how do we restrict cross-selling,” or even “how do we prevent cross-selling from hurting customers?” It’s “how do we identify and mitigate situations when management has the opportunity to gain substantial compensation, but might unfairly harm employees and customers in order to obtain it?” Put another way, “when management has access to a cash cookie jar, how do we prevent them from screwing everyone over when they’re stuffing their hands into it?” Boards – are you listening?

One of the rules regulators are now considering is a “requirement for the biggest firms to claw back bonuses from employees engaged in misconduct that results in significant financial or reputational harm or any fraud. Those proposed rules would require banks to take back pay for wrongdoing for at least seven years after the executive receives the payment,” Yuka Hauashi and Christina Rexrode wrote in The Wall Street Journal on September 20th (Hearing to Amplify Ruckus Over Pay). It’s a good rule that makes sense not only for financial services, but for any industry.

A failsafe regulation would be peachy, but I’ll settle for reducing the risk that no more John Stumpfs (Wells Fargo’s CEO) will be allowed at the controls of a major company. As Holman W. Jenkins Jr. wrote in his column, Wells Fargo’s Incentives Go Awry, “All companies operate on incentives and systems that are not perfect. Comcast means for its ‘retention specialists’ to win back irate customers, not bully them in ways that end up on YouTube. Yet it happens.”

Consumers won’t be protected through more scrutiny over cross-selling, or from curtailing it, but we can make things better by getting rid of some damaging practices:

1. Committing to lopsided bonus structures that enrich individuals, not the company.

2. Providing low wages for wages for salespeople, and making subsistence income contingent on achieving “stretch” goals, or on meeting performance metrics that are extraordinarily difficult.

3. Heaping sophomoric praise on salespeople for “busting quotas” and “crushing their numbers,” without considering whether they have been ethical.

4. Assuming that salespeople “thrive” on pressure, as one popular blogger wrote. That’s a myth. Plenty of salespeople face pressure, but when there isn’t an upside for them, it’s hard to describe that as “thriving.” More accurately, salespeople with pay at risk (commission) have – or should have – a congruent tolerance for uncertainty.

5. Assuming that good salespeople will always find a way to make goal – no matter the odds. The sentence is mostly correct – just change good to clever.

6. Letting what happens in sales stay in sales. Companies must begin to have ongoing governance over their sales processes, or suffer the consequences when poop hits the fan.

Concern over cross-selling is misdirected. If you’re looking for the real culprit in Wells Fargo’s case, you will find it in the emergence of a trend: executive pay tied to stock price appreciation. “Changes like these are directly responsible for CEO’s seeing a 15-fold increase in comp in the last 40 years,” said Bobby Parmar, professor at the University of Virginia’s Darden Graduate School of Business Administration.

Parmar says that boards rationalize for fulfilling an obligation to grow and protect shareholder value. But he says this is based on flawed assumptions. “Shareholders don’t own the corporation. Public companies own themselves. Shareholders own a contract called a share. There is no legal reason to put shareholder interests above anyone else. It’s a choice, but not mandated. There is no legal duty to maximize profit. As long as executives aren’t violating the law, the courts won’t interfere with their decision making . . . Across hundreds of studies, there is no evidence that companies that maximize shareholder value are more profitable.”

That’s not what I was taught in B-school, and I have little doubt that many vociferously disagree. But Parmar is right. It’s the relentless goal of growing revenue and the myopic pursuit of share price appreciation that ultimately creates substantial stakeholder wreckage.

A huge relief to cross-sellers. Now, you can come out from your hiding places. Be proud of what you do, and who you are!


  1. What’s often missing in the discussion about Wells Fargo (and other corporate situations where the enterprise culture is overwhelmingly driven by sales and profits) are the dual concepts of ‘customer’ and ‘perceived value’. Cross-selling, in and of itself, is neither good nor bad, if and where there’s an honest intersection between customer emotional and functional benefit and company financial goals.

    I’d imagine, for example, that TD Bank’s provision of an instant-issue ATM/debit card for customers – – is something of a cross-sell driver, representing added value to the bank’s customer programs; but, they don’t push customers to take on new fee-based features, nor do they falsify records to build per-customer program count.

  2. Hi Michael: thanks for your comment. As one who has opened several bank accounts over many years, I’m curious about TD Bank’s motivation for making ATM cards available instantly. Anecdotally, it’s never been the least annoying or inconvenient for me to wait a week or so for my card to show up in the mail. Maybe it’s cheaper for the bank to issue cards right then and there. Maybe they implemented this based on steady customer feedback. Maybe it’s both. Or maybe, there are other reasons. Interesting, too, that TD Bank adopted the same parlance as Wells – calling their bank branches ‘stores.’

    To me, ‘bank’ just sounds better . . .

  3. For years, TD Bank (and its U.S. predecessor Commerce Bank, which TD acquired several years ago) has been providing differentiated and positive value to customers. This article is a summary of approaches they have applied, including instant provision of ATM/debit cards, so that customers can enjoy the convenience of using them right away:

    Calling branches ‘stores’ isn’t new for TD Bank. Vernon Hill, who founded Commerce Bank (and was the owner of multiple fast food franchises), began using this term decades ago. Now, especially because of increased digitization within the industry, branches do function much like financial services stores.

  4. During his interrogation of John Stumpf on Capitol Hill today, Colorado’s Representative Ed Perlmutter voiced the same issue I did. He chafed at the semantics Stumpf used, and specifically called out his displeasure over the term ‘stores’, citing it as one of the artifacts of corroded trust between financial institutions and consumers. He felt Stumpf’s parlance that also included ‘sales quotas,’ and ‘salespeople’ was incongruent with the mission of banks in particular. That is, to hold and protect their customer’s money. To Perlmutter, Stumpf’s language represented a marketing trivialization.

    To see the Congressional hearing, click here:


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